Charity Trustees: backbones, beacons and buck-stops

An opening disclaimer – I’m not writing this as a governance expert, but as someone with access to Google (other search engines are available) and who deeply appreciates the crucial roles trustees play in maintaining our charities.

All charities in the UK, need to have a board of trustees. They are the principal custodians of our charities, playing a pivotal role in ensuring that we operate efficiently, ethically, and in keeping with our charity’s mission. Without trustees, charities cannot exist, let alone function. Their responsibilities are significant and varied, ranging from governance and strategic oversight to financial management and legal compliance, not to mention supporting the charity’s executive leadership. Given the vital role they play in the charity, we might view them as the backbone – the part of the charity’s metaphorical body to which everything else is ultimately connected.

And let’s not forget that for the vast majority, they perform this vital role on a voluntary basis, only claiming expenses (and many don’t even do that). A (relatively) small number of charity trustees will hit the news because they fail to fulfil some or all of their duties and responsibilities, but the significant majority of trustees are incredibly committed, supportive and generous with their own time.

Given the critical nature of their duties, it is imperative for trustees to fully understand their roles and responsibilities, and to stay up to date on the rules, regulations and laws governing charities in the UK. Read on as we delve into the essential functions of charity trustees and discuss why continuous learning and awareness is so important.

Being a backbone can be tough

In simple terms, we can break down the role of a trustee into three key areas:

Governance and Strategy - Trustees are entrusted with the governance of the charity, ensuring that it remains true to its purposes and operates in the best interests of its beneficiaries. This involves setting the strategic direction, ensuring the necessary policies are in place (and abided by), and making decisions that guide the organisation towards fulfilling its objectives.

Financial Oversight – Trustees must oversee the charity's finances. This includes approving budgets, monitoring financial performance, ensuring proper accounting records are maintained, and safeguarding the charity's assets. Financial vigilance is crucial to maintain donor trust and to ensure that funds are used effectively and transparently.

Compliance and Legal Responsibilities - Trustees must ensure that their charity complies with all relevant laws and regulations. This encompasses everything from data protection and employment law to health and safety regulations. They are also responsible for submitting annual reports and accounts to the Charity Commission (and Companies House for some).

Let’s consider a fourth one – being a beacon. According to the Oxford dictionary, a beacon is “a light or other visible object serving as a signal, warning, or guide at sea, on an airfield”. In addition to the three points above, many of us will hope our trustees are sufficiently attuned to the needs of the charity and their formal responsibilities, to know when to signal a change of course, warn us when things are heading in the wrong direction, or guide us through rough seas. We look to our trustees to guide us and spot danger before we crash into the proverbial rocks.

Being backbones and beacons is crucial for the success of our charity, but what role do trustees play when things go south? This is when they become the buck-stops – the ones who will ultimately be held accountable by the Charity Commission, Companies House and legal entities for what the charity, under their care, has or has not done. We all hope it will never come to this, but this doesn’t mean we shouldn’t recognise the harsh reality.

Why Trustees Must Stay Up to Date

Regulatory Changes - The regulatory landscape for charities is constantly evolving. New regulations and changes to existing laws can have significant implications for how charities operate, so it’s crucial that trustees stay informed about these changes to ensure that their charity remains compliant and avoids legal pitfalls.

Best Practices in Governance - The field of charity governance is always advancing. New best practices emerge, informed by the experiences of other organisations and the guidance of regulatory bodies. Staying up to date with these practices helps trustees to enhance the effectiveness and efficiency of their governance.

Financial Management – Recent years have demonstrated just how volatile things can be in terms of finance and economics. Change can be swift, and the impact(s) can cut deep into a charity’s financial health. It is important, therefore, that trustees stay abreast of developments in financial management to make informed decisions that safeguard the charity's resources.

Technological Advancements - Technology is transforming how charities operate, from fundraising and communications to data management and service delivery. Trustees who stay informed about technological advancements can leverage these tools to improve their charity's operations and outreach.

Risk Management - Identifying and mitigating risks is a crucial aspect of a trustee's role. All of the areas previously mentioned will encompass and present their own risks, so it’s crucial for trustees to be aware of how to identify risks when they present themselves, and what to do about them.

Conclusion

Charity trustees have a profound responsibility to their organisations and the communities they serve. By staying informed and up to date on their roles and responsibilities, trustees can ensure that they govern their charities effectively, maintain compliance with legal and regulatory requirements, and navigate the complexities of the charitable sector with confidence. Continuous learning and adaptation are not merely beneficial but essential for trustees to fulfil their fiduciary duties and to drive their charities towards sustainable success.

And a final word to all of you who commit your time and energy to be the backbones, beacons and buck-stops of our charities – thank you. We couldn’t do it (literally) without you.